Validus Reinsurance, the principal operating subsidiary of Validus Holdings (VR), has been removed from under review by A.M. Best, with negative implications. The rating agency has affirmed the financial strength ratings of “A-" (Excellent) and issuer credit ratings (ICR) of “a-" of Validus Reinsurance Ltd. (Validus). A.M. Best has also removed from under review with negative implications and affirmed the ICR of “bbb-" and the indicative ratings for securities available under the shelf registration of “bbb-" on senior debt, “bb+" on subordinated debt and “bb" on the preferred stock of Validus Holdings. The outlook assigned to the above ratings is “stable". The stable outlook reflects the expectation that operating performance and risk-adjusted capitalization will continue to remain supportive of the current rating levels. IPC Holdings was acquired by Validus on Sep 4. After the acquisition all renewal business will be written ...

On July 1, Wednesday, Flagstone Reinsurance Holdings Limited (FSR) offered to buy IPC Holdings Ltd. (IPCR), which Flagstone said is superior to the Validus (VR) offer.Flagstone has offered 2.638 of its common shares for each IPC common share plus $5.50 per share in cash, valuing IPCR at $33.62 per share. This results in a premium of 21.1% over IPCR's Wednesday closing price of $27.77. The Validus bid was 1.1234 of its shares plus $3.75 in cash, valuing IPCR at $28.86 a share. Following the announcement by Flagstone, Validus has "reaffirmed" its offer today.Last week, IPCR's Board had opposed the Validus offer, stating that it is at a discount to its book value. However, Validus refused to budge in economic terms, considering the offer to be "full and fair." IPCR had been negotiating with Validus ...

We maintain our Hold rating on the shares of IPC Holdings Ltd. (IPCR). The company’s operating earnings of $1.62 per share came in significantly ahead of our expectations.

The ongoing turbulence in the credit market had its impact on the investment portfolio. However, we note that there continues to be a number of medium severity catastrophe events around the globe, which could increase premium rates locally in 2008. Though the company has built a track record of strong underwriting results, while maintaining a strong balance sheet and ROE in the mid-teens since its inception, currently we think that the high volatility in its earnings stream based on its near mono-line business model will continue.

We are lowering our 2008 and 2009 earnings expectations to $4.93 per share and $4.55 per share, respectively, from $4.51 per share and $4.45 per share, previously. At the current price, IPC’s shares trade at

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